Cisco announces fourth acquisition of the year, buys MindMeld for AI

In its fourth acquisition announcement of the year, networking giant Cisco has shared its intention to purchase AI start-up MindMeld.

Cisco has made its desire to be viewed as a software company abundantly clear in 2017. Beginning in January, the company acquired application intelligence services provider AppDynamics for $3.7 billion. In May, Cisco announced its intention to purchase software-defined WAN start-up Viptela, and advanced analytics start-up Saggezza. Next up: MindMeld.

Why? Because Cisco believes that AI and machine learning will soon play an increasingly vital role across all parts of its business. “The workplace of the future is one powered by AI,” said Rowan Trollope, senior vice president, in Cisco’s IoT and Applications Group. “But other than Siri and a small handful of others (Google Home, Cortana, etc), there are surprisingly few convincing conversational bots,” Trollope said in a blog post.

Challenging the norm

San Francisco-based MindMeld has built an AI platform to challenge that norm; to build intelligent and human-like conversational interfaces for any application or device. Cisco already has AI and machine learning capabilities built into its portfolio through Stealthwatch, the company’s network visibility and threat detection analytics software, and powering products like the digital whiteboard and video conferencing technology in Cisco Spark Board.

Now, users of those products will be able to interact with them through the voice and chat interfaces. For example, users will be able to interact with Cisco Spark via natural language commands, and customers using Cisco’s voice and telephony hardware will soon have the opportunity to integrate voice AI into their meeting rooms.

“This is the next step into a comprehensive AI-powered collaboration solution for Cisco,” Trollope said. “Integrating MindMeld into the Cisco Spark platform will transform how users interact in Cisco Spark Spaces, Cisco Spark Meetings, and Cisco Spark Care.”

Software food chain

Speaking to Internet of Business about the deal, Clive Longbottom, analyst at Quocirca, said “Cisco has to become a major IoT player. If it doesn’t, it will move down the food chain to being a datapipe management company, where there is decreasing future margin.”

“By acquiring MindMeld, Cisco will be hoping to try and gain not only the back end ‘glue’ for IoT devices, but also the driving interface between what happens at the human level and the technical one.”

Longbottom suggested that the move could go both ways. It may force the likes of Amazon and Google to move away from their consumer-first approach and become enterprise-ready. However, it may prove to be a “mistake”, he added, if Cisco cannot change its internal culture to realize that human interfaces need to be human.

“Overall, though, it makes sense to me; and I believe that Cisco can make it work, as long as it moves at a faster rate than it has done to date in the IoT world.”

Cisco will acquire MindMeld for $125 million in cash and assumed equity awards. The acquisition is expected to close in Cisco’s fourth quarter of fiscal year 2017, following customary closing conditions and regulatory review.